I am an author, independent researcher and speaker exploring innovation, information technology trends and markets. I am also a co-author of the SOA Manifesto, which outlines the values and guiding principles of service orientation in business and IT. I also served on the program committee of the International SOA and Cloud Symposium series.
Much of my research work is in conjunction with Forbes Insights and Unisphere Research/ Information Today, Inc., covering topics such as cloud computing, digital transformation, enterprise mobility, and big data analytics. I am also a contributor to CBS interactive, authoring the ZDNet "Service Oriented" site.
In a previous life, I served as communications and research manager of the Administrative Management Society (AMS), an international professional association dedicated to advancing knowledge within the IT and business management fields. I am a graduate of Temple University.

Why Owning Software or Data 'No Longer Makes Sense'

Is a subscription-based economy — fueled by cloud computing — now the new normal? Two industry experts participating in a recent Webcast say yes, and enterprises of all types and sizes are being drawn into this new world.

“We are moving into a world that is evolving into a subscription economy,” says Erik Berggren, vice president of customer results and global research at Success Factors (an SAP company). “What you want both as a consumer and as a business user is the utility of something. You want a means of transportation. You want computing power. You want answers to your questions. You want to get something done really quickly in your business. That’s going to be the driving force.”

Berggren was joined Don Huesman, managing director of the Innovation Group at the Wharton School of the University of Pennsylvania, in a new webcast series hosted hosted by Knowledge@Wharton discussing the current and future implications of cloud computing.

The impetus behind cloud is more than financial, Huesman relates. More often than not, “psychological factors” are taking precedence over “financial factors” in decisions to adopt cloud, he says. “Oftentimes I think business decisions are made on factors other than rational financial decision making processes. The sort of the agility that comes and is natural to the consumer electronic space is something that managers of businesses are looking for in their own enterprise solutions. That means turning to the cloud.”

Cloud represents the forefront of the growing consumerization of IT, Huesman adds. “The days of having front-loaded initial expenditure on a large product that you own and pay maintenance on is over. A much more economical approach to a subscription-based service is in our future.” This may even apply to content as well, he adds. “Owning data doesn’t make a lot of sense in the sense of holding it in your hand or having it on a laptop. It’s about access to the resources you need on whatever device you may have handy.”

Berggren agrees that data is now more likely to come from the cloud than from local machines. “When you’re working on and consuming data from some business application, the application will look at data from some other place on the internet and combine that with the data you have in your own cloud installation,” he points out. “This makes it possible to get instant benchmarking, in addition to getting decision-making support to see where you are. That is what we think people will get used to and expect from their IT application.”

Speed to market is another aspect of cloud computing – business ventures can be created and launched in a matter of weeks employing resources form the cloud. “Here at Wharton I see a lot of young entrepreneurs and developers who work sometimes with their colleagues from the engineering school and will use the cloud to build out what looks to be a full-blown business in the course of just a few weeks, mostly in an effort to attract venture capital or to get a good grade in an entrepreneurship class,” ” Huesman says. “But it’s remarkable that they can spin up what would have been unthinkable even a few years ago in terms of a highly professional and polished presence of functional e-commerce websites..”

This new business-in-weeks capability is increasingly being seen within the business world at large, Huesman also says. “The cloud has been tremendously energizing for small, new start-ups that can quickly spin up capabilities in response to demand.” he says, adding that there is also “the opportunity to be gradual in building up a capability in this area for established businesses.” He predicts “a tighter and closer alignment with new enterprises, either wholly baked or new enterprises within existing companies, looking to diversify their portfolio of capabilities and build a future.”

Cloud computing, for all intents and purposes, is “another way of thinking about outsourcing,” says Berggren, and to a large extent, “insourcing” as well. “You’re insourcing best practice and process capabilities into your organization so that you can focus on your core business. There are cloud applications that help you drive more productivity and execution power.”

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Nice article Joe :) I definitely agree with the sentiment (at least on the software side), being a big user of cloud services.

However — there always has to be one of those when commenting on an article ;-) — on the “owning data” point I am less convinced. While I don’t feel the need to have my data physically stored on my machine, I most definitely have the need to “own” it. And businesses should even more so. I am an analytics strategist so may be a bit biased :-) but I firmly believe that the future business differentiator will be those companies that can leverage the greatest insight from data – combining data they don’t own (such as social media) with data they do. And the more of their own data they can bring into the value proposition, the greater the differentiation.

There is also a secondary challenge with the cloud that I believe is going to hamper the smooth transition from desktop to cloud, and that is findability of data. We moan about the findability of our own data when its all stored on our own machines, wait until its scattered to the four winds. Until such time as the cloud brings us “personalized” (this is key) federated search of our content irrespective of where it physically resides, I suspect its going to be a double-edged sword.

Cloud computing is here to stay. However, that doesn’t mean businesses or individuals must forfeit their data and/or software. I’ve written my own blog post in response: http://joshhamit.com/tech/why-it-makes-sense-to-own-your-data-and-software

There are so many redundant sources of data. Collecting it isn’t the differentiator. Putting your own spin on its use is. For too long, organizations kept what they were collecting close to their vest. But unless data management is a core competency, it is likely underutilized. A cloud service can centralize the activity and democratize the information. Nevertheless, organizations that use it derive greater strategic advantage. –Paul Calento http://bit.ly/paul_calento